(1) Where a business entity calculates an allowance for bad debts for accounts receivable, other receivables or other bonds corresponding thereto as necessary expenses, such allowance for bad debts shall be included in necessary expenses when calculating the amount of income generated in the relevant taxable period within the extent prescribed by Presidential Decree.
(2) The balance of the allowance for bad debts included in necessary expenses pursuant to paragraph (1) shall be included in the total income when calculating the amount of income in the following taxable period.
(3) Matters necessary concerning accounting treatment of an allowance for bad debts shall be prescribed by Presidential Decree.[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]